Thursday, July 28, 2011

On Friday, assuming the accuracy of current reports, the Minnesota Vikings will finalize a deal that will bring veteran Washington quarterback Donovan McNabb to Minnesota just as the team bids adieu to wide-receiver Sidney Rice. Most in the media are reporting that this is the type of trade-off that the Vikings will need to accept to change their roster this year.

Nothing could be further from the truth.

Since Zygi Wilf and company purchased the Minnesota Vikings from Red McCombs for approximately $625 million, ceding McCombs an undeserved profit of nearly $400 million, Wilf has made clear his intention of spending to the salary cap each year in the hope of garnering support for a publicly funded stadium. Those paid by the Vikings to cover the team, and even those whose careers are merely inextricably tied to the fortunes of the Vikings, pointed to Wilf's spending as an example of the team's "long-term commitment to fielding a competitive team in Minnesota."

That contention is, of course, nonsense. But that fact puts the Vikings in far better salary cap position this year than most in the media have yet acknowledged.

The Vikings' modus operandi in spending to the cap under the Wilfs' ownership has quietly been guided by the determination to spend to the cap in year one while freeing up space for spending (or non-spending) in future years. In the NFL, this is a relatively easy accounting move that most teams eschew because they truly are in it for the long haul and they do not want to commit to maximum dollars each and every year.

To explain the difference, consider the Vikings signing a player to a five-year deal for $20 million with $10 million guaranteed. A second team, meanwhile, signs a player to the same five-year deal. The difference between the Vikings' approach and that of most other NFL teams, however, is that while the latter will designate the $10 million in guaranteed money a "signing bonus," the Vikings tend to designate the guaranteed money in almost every case as a "roster bonus."

The Vikings' approach accelerates all guaranteed money to year-one salary cap commitments while the signing bonus is pro-rated over the life of the contract. For the Vikings, the benefit is two-fold--it gets the team up to the salary cap in a hurry and it pays off the guaranteed portions of contracts (i.e., the portions that must count against the salary cap) up front.

In 2010, the Vikings had approximately $126 million in salary cap commitments. With the new CBA establishing a salary cap of $120 million, some members of the media reported that the Vikings were $5 million over the salary cap for 2011. Based on the Vikings' approach--and the actual known salary numbers--that figure is grossly exaggerated.

For currently signed players, the Vikings have commitments in the neighborhood of $95 million. That number will go up when McNabb's contract is finalized.

McNabb's figure could quickly propel the Vikings' cap hit above $105 million--but that, again, assumes that the Vikings continue to rely on a roster rather than signing bonus with McNabb. Should the Vikings rely on a signing bonus and multi-year contract for McNabb, they can sign him with minimal impact to the 2011 salary cap, leaving even more room to sign additional players.

In short, the Vikings have as many options as do most other teams in the league--including those teams widely regarded as having extensive salary cap space. And that considerable space assumes that the Vikings retain the players that have not yet left or been cut by the team--players like Madieu Williams who will count over $5 million against the Vikings' 2011 cap if retained but nothing if cut, Bryant McKinnie ($4.9 million) and Bernard Berrian ($3.9 million). If the Vikings are able to sign an offensive tackle, McKinnie and his $4.9 million cap hit will reduce to zero. Berrian's hit of zero likely was determined last year.

The question for Minnesota is not, then, whether they have cap room to sign the players that they need to make another run at the Super Bowl. Rather, the question is whether they will take advantage of the cap situation in which they almost uniquely have placed themselves to build a team around veterans Adrian Peterson, Visanthe Shiancoe, Donovan McNabb, Kevin Williams, Jared Allen, Chad Greenway, Antoine Winfield, Ryan Longwell, Percy Harvin, and Chris Kluwe, that gives them such an opportunity. That question is left to be answered.

Thursday, July 21, 2011

With the NFL and the NFLPA appeared headed for an imminent labor accord, the Minnesota Vikings soon will be in a position to weigh their options for proceeding with the 2011 NFL season. Unlike most other teams, and certainly more so than any other team in their division, the Vikings are at a crossroad that might be irresolvable in the short term. But with the near certainty of money to spend and free-agents to lure, the future might be less dire than it currently appears.

As yet, there is no clear picture of what the new collective-bargaining agreement between the NFL and the soon-to-be-resurrected NFLPA will look like. While it is possible that the agreement will significantly curtail what otherwise would have been a banner year for free agency, that seems unlikely given what the lockout was all about--gaining for the NFL a greater percentage of the league's profits in exchange for something for the players. Conceding both gross/net profits and permitting curtailment of free-agency likely would not fit that bill.

That suggests that the NFL will experience the most bountiful free-agency period in league history when the labor dispute is resolved, leaving the most paramount question for teams in need of free agents what the salary cap will be in 2011.

With only a handful of free agents worth resigning and a healthy salary cap situation (assuming certain personnel decisions and CBA terms), the Vikings could be in strong position to sign numerous high-end free agents, particularly if they eschew any temptation to secure a high-end free-agent quarterback.

Among the Vikings' primary free-agent targets ought to be offensive linemen. Numerous linemen should be available in the draft, including New England Patriot Logan Mankins. The key for the Vikings will be to sort through the options and to sign two or three established linemen with significant years left in them. That will shore up the team's greatest weakness from the past two seasons and allow the team to focus on building around a young quarterback without having that quarterback--Joe Webb or Christian Ponder--suffer the mechanical lapses frequently associated with a collapsing or sieve pocket.

In addition to the offensive line, the Vikings are in need of a wide-receiver--either Sidney Rice or a capable replacement, a sure-handed, quick running back, yet another cornerback, a defensive end, a safety, and a linebacker. In short, the team is in need of most everything outside of a tight end. By late Thursday, they might already be on the road to addressing these needs.

Friday, July 15, 2011

The not so surprising word out of Los Angeles is that the purportedly "done deal" of a new NFL-ready football stadium in downtown Los Angeles apparently is not so done. As a fiscal matter, that ought to shock nobody outside of those eagerly standing in line to swallow the constant swill that the NFL and its ownership partners have been dishing out in attempts to garner team owners lucrative, publicly funded stadiums; Los Angeles, like the rest of the State of California, is in a financial mess and spending hundreds of millions on a new stadium is unlikely to do much to change that for the better.

The citizens of Los Angeles seemingly finally understand the illogic of the Anschutz-proposed stadium deal, however, and are beginning to make clear that, in this financial climate, real, rather than fanciful, financial decisions ought finally to prevail. That means no stadium deal on the public dime--certainly not without a team committing to sharing team revenues with the party footing the bills.

While Los Angeles undergoes its epiphany, the people of Minnesota are looking more and more like the people of Los Angeles, pre-epiphany. On Thursday, Minnesota DFL Governor Mark Dayton acquiesced to what the Republican-led state legislature essentially offered on June 30 as a new state budget. This, after two weeks of a state shutdown that kept "essential" services flowing while cutting off many state revenue streams.

Not satisfied with their inability to hammer out a budget deal by the state mandated deadline--but, as in the case of many legislators, perfectly willing to accept overtime pay as compensation for this inability--the Governor and Legislature offered a proposal that yet again balances the state budget by borrowing from the future, with the cornerstone of the deal a tradeoff of a portion of the tobacco settlement money today for future money from the fund. It is, of course, a dramatic loss for all who live beyond today and who will not have the luxury of selling off future assets to cover debts created earlier. In short, it is the height of fiscal irresponsibility.

Considering the move that legislators and the Governor have made to mortgage Minnesota's future without resolving underlying budget issues, it is no small wonder that the brethren of those same people, those serving Ramsey County, are proposing a similarly dysfunctional spending spree, without meaningful evidence of necessary public revenue streams, to build the Vikings a new stadium in Arden Hills.

Ramsey County's decision, of course, came against the backdrop of not one but two proposed LA-area, NFL-ready football stadiums. This, despite much evidence strongly suggesting the unlikelihood of either deal actually going through in the near term and further suggesting that the NFL is unlikely to allow an NFL team to relocate to LA--and that the Wilf's are, in any case, a highly unlikely relocation animal, given the limited return on relocating versus staying in Minnesota.

With LA seemingly set to pull the plug even on discussions about a publicly funded NFL-ready stadium, one ought to expect the entire Ramsey County stadium deal to undergo thorough reconsideration, if not outright rejection. That's what one would have expected of a state once lauded for balancing present and future interests and making wise decisions for its residents. If yesterday's budget deal is any indication, however, the Vikings ought to feel at least marginally comforted by the possibility that Minnesota is attempting to assume California's moniker--"only in."